Much has been revealed in the last couple of weeks that we didn’t know before thanks to flurries in the media, resignations from the Central Bank and the outcomes of official investigations. For the first time in a real sense, light has been shed on the circumstances of last July’s draconian imposition of Resolution measures on FBME bank’s Cyprus branch and the string of consequences of that decision.

In announcing his resignation from the Board of Directors of the Central Bank of Cyprus on Friday, 20 March 2015, Stavros Zenios issued a written public statement in Greek, which he also listed on his blog. This statement in Greek was run in full on the news website Stockwatch, and we have been granted permission to provide a link to its site: http://www.stockwatch.com.cy/nqcontent.cfm?a_name=news_view&ann_id=219817.

Stavros Zenios, a non-Executive member of the Board of Directors of the Central Bank of Cyprus, resigned from the Board this morning, 20 March. He is the second member to step down in recent days; Stelios Kiliaris resigned a week ago citing the impossibility of continuing to serve in the present environment. Mr Kiliaris was also a member of the three-person Resolution Committee who imposed the Resolution Decree on FBME.

A report has appeared on the news site of leading media outlet, Sigmalive, centred on a letter written by FBME’s external legal counsel and sent to the Republic’s Attorney General. In this, exceptionally strong complaints have been made about Dinos Christofides in regard to his role as Administrator appointed to run the FBME Bank branch, including the accusation that he may have broken the law.

There is mounting evidence of the difficulties faced by people working for companies restricted to a EUR 200 a day maximum payout from their FBME Cyprus accounts. This EUR 200 level has been in place for corporate as well as individual depositors since the beginning of March in a draconian measure enacted by the Administrator of the Central Bank of Cyprus. It was previously EUR 1,000 a day.

Information has come to FBME Limited that the Republic of Cyprus at the Arbitral tribunal at the ICC in Paris, are seeking to have the Cyprus branch of FBME Bank closed on the grounds that no buyers for the branch have been found. In other words, because the Resolution measure foisted on the branch by the CBC last July hasn’t worked they want to withdraw the FBME licence. They add that they have to do this now because closure would trigger the deposit protection insurance and that the FBME funds held by the CBC are at a level (EUR 158 million) that will enable them to make these insurance payments.

Despite facing a sea of troubles of its own making, the Central Bank of Cyprus (CBC) is flailing around with more desperate measures to prove it remains a dangerous entity. As the Governor and the CBC’s Executive Directors, one of whom resigned yesterday, face questions in Parliament and the risk of compensatory payouts grows stronger by the day, the CBC is focused only on furthering its own dubious ends.

Reflections on the handiwork of the Cyprus Resolution Authority and Resolution Committee.

The Resolution Authority and Committee of the Central Bank of Cyprus (CBC) are very much in the news at the moment, none of it favourable to them. The latest debacle is the Administration of the defunct Laiki Bank, in which Cyprus account holders suffered huge losses of hundreds of millions of euros. The specific focus is on the Resolution Authority’s highly conflicted legal action against Laiki’s former Chairman, Andreas Vgenopoulos. The Special Administrator appointed to handle the Resolution of Laiki, Andri Antoniades, resigned on Monday 2 March, blaming the Governor of the Central Bank and the Resolution Authority for monkey business linked to the legal case, including the assertion that the Governor’s daughter is on the former Laiki Chairman’s payroll despite earlier promises she would step down.

This article follows on from that above, Resolution Authority Adrift in a Sea of Troubles.

The Resolution Authority of the Central Bank of Cyprus (CBC) – actually its Board of Directors – and the Resolution Committee – three members of the same Board – appear, remarkably, answerable to no one except each other. They have bungled the Resolution of the Island’s Laiki Bank, causing massive problems across the whole domestic sector and have used a bogus interpretation of a Resolution Decree to expropriate the Cyprus branch of FBME Bank. In the process, they have caused an almost total collapse in confidence in the central bank, squandered opportunities to protect account holders and creditors, and risked compensation payouts of hundreds of millions of euros.